Key Points
Vanguard FTSE Developed Markets ETF offers a slightly lower expense ratio of 0.03% compared to 0.05% for Vanguard Total International Stock ETF.
Vanguard Total International Stock ETF provides exposure to both developed and emerging markets, while Vanguard FTSE Developed Markets ETF focuses exclusively on developed economies.
Both funds have delivered total returns exceeding 26% over the last 12 months with nearly identical five-year maximum drawdowns.
Choosing between Vanguard Total International Stock ETF (NASDAQ:VXUS) and Vanguard FTSE Developed Markets ETF (NYSEMKT:VEA) involves weighing comprehensive global exposure, including emerging markets, against a lower-cost focus on established international economies.
Both funds serve as core pillars for international diversification. While one captures nearly the entire non-U.S. investable universe, the other narrows its scope to established economies like those in Europe, Canada, and the Pacific region, offering a slightly more streamlined and cost-efficient approach for investors.
Snapshot (cost & size)
| Metric | VXUS | VEA |
|---|---|---|
| Issuer | Vanguard | Vanguard |
| Share price (as of 7/10/26) | $85.34 | $70.99 |
| Expense ratio | 0.05% | 0.03% |
| 1-yr return (as of 7/10/26) | 26.40% | 27.40% |
| Dividend yield | 2.60% | 2.60% |
| Beta | 0.92 | 0.97 |
| AUM | $652.3 billion | $317.3 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Cost is a minor factor here, as both funds are exceptionally affordable. The Vanguard FTSE Developed Markets ETF edges out its sibling with a lower 0.03% expense ratio compared to the 0.05% charged by the other Vanguard fund.
Performance & risk comparison
| Metric | VXUS | VEA |
|---|---|---|
| Max drawdown (5 yr) | (29.4%) | (29.7%) |
| Growth of $1,000 over 5 years (total return) | $1,522 | $1,599 |
What's inside
Vanguard FTSE Developed Markets ETF focuses on established economies outside the United States, tracking the FTSE Developed All Cap ex U.S. Index. Its portfolio includes 3,865 holdings, providing broad coverage across large-, mid-, and small-cap segments in regions like Europe and the Pacific. The fund sector allocations are led by financial services at 23%, industrials at 18%, and technology at 17%. Its largest positions include Samsung Electronics at 3%, SK Hynix at 2.6%, and ASML Holding at 1.91%. It was launched in 2007. The fund has paid $1.81 per share over the trailing 12 months, which on its recent ~$71 share price works out to a 2.6% yield.
Vanguard Total International Stock ETF provides a more expansive reach by tracking the FTSE Global All Cap ex US Index, which includes both developed and emerging markets. With 8,738 holdings, it offers deeper diversification, though its primary sector weights are similar, led by financial services at 22%, technology at 21%, and industrials at 16%. Top holdings include Taiwan Semiconductor Manufacturing at 3.9%, Samsung Electronics at 2.2%, and SK Hynix at 1.9%. It was launched in 2011. The fund has paid $2.19 per share over the trailing 12 months, which on its recent ~$85 share price works out to a 2.60% yield.
For more guidance on ETF investing, check out the full guide at this link.
What it means for investors
Investors looking to diversify their portfolios beyond stocks of U.S.-based companies have two solid options in the VEA and VXUS ETFs. Both offer exposure to thousands of companies outside of the United States, with concentrations in financial, industrial, and technology stocks. Both have delivered similar performances over the short term, and both charge low expense ratios, so the choice likely comes down to whether you prefer to include or exclude companies that are headquartered in emerging markets like Taiwan, China, Brazil, and India.
Taiwan Semiconductor Manufacturing alone has had an outstanding recent performance, delivering almost 300% gains over the last five years, and is likely one component of VXUS’s success. In general, investors assume a bit more risk when investing in emerging markets, which can exhibit geopolitical instability, greater currency volatility, and complex domestic policies. Yet companies also have the potential to deliver explosive upside in these markets as they lay the groundwork for economic stories that may have already played out in developed markets like Europe and Canada.
While these two funds have exhibited similar returns and risk profiles recently, there’s no guarantee that will always be the case. Choosing between VXUS and VEA will ultimately come down to your tolerance for risk versus your desire for broad diversification.
Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Taiwan Semiconductor Manufacturing, and Vanguard FTSE Developed Markets ETF. The Motley Fool has a disclosure policy.